Program : Degree

Course : Malaysian Economy

Code : ECMB313

Credit Hours : 03

Contact Hours : 03

Semester : Semester 1 Academic Year 2012/2013

Subject Synopsis

This course provides the student with an overview of the Malaysian economy - the role of the government and its economic interaction with other countries in the region. Topics such as government economic plans and policies, income distribution and poverty eradication, labour force and labour relations, the financial system and international trade and investment will be covered in this course.

Learning Outcomes

At the end of this course, students are expected to:

1. Critically analyse the Malaysian economy and its components.

2. Apprehend the economic development of the nation thus far.

3. Apprehend fundamental economic analysis provided by the media.

4. Rationally analyse the macro economy environment and the external factors in business decision-makings.

5. Assess, analyze and suggest appropriately methods on economy crisis.

6. Rationally analyse the implication of macro economy environment, current issues and implications of the current policies.

Wednesday, May 29, 2013

Malaysian Plan

The Malaysia Plan is a 5-year Malaysian government national development initiative. The plan is a legacy from British colonial rule in Malaya after the Second World War.

The 5-year plan began with the First Malaya Plan, from 1956 to 1960. This initiative was continued with the Second Malaya Plan from 1961 to 1965.

After the formation of Malaysia in 1963, the 5-year plan has been converted to the Malaysia Plan (MP) with the First Malaysia Plan which began in 1966 until 1970, the difference being that the economic plan now included the entire nation – including Sabah and Sarawak, as opposed just Peninsular Malaysia.

Economy policy

The economy of Malaya at Independence was deeply segregated as between ethnic groups: in geographic location, in types of economic activity and in levels of livelihood. As compared with the non-Bumiputera :

i.        Malays form a much higher proportion of population in rural areas than in towns;

ii.      Malays populate the relatively poorer States and occupations to a higher degree;

iii.    Malays form a higher proportion of the workforce in low productivity traditional agriculture and a lower proportion of the workforce in high productivity modern industry and commerce;

iv.     Within given industries and enterprises Malays typically hold lower-echelon position;

v.       Malays have property rights over only about one-third of land under agricultural cultivation;

vi.     Malays have a significantly lower share of ownership, control and management of industrial and commercial enterprise and, as a result, less control of their own economic destiny;

vii.   The average Malay has a much lower standard of living.

These disparities persist today and remain major issues for policy debate and formulation.


Introduction Agriculture rational   

The agricultural sector has contributed significantly to the growth and development of the Malaysian economy even though the Malaysian economy has undergone significant structural changes over the last four decades. Agriculture was the main contributor to the national economy since independence.


Malaysia is a country on the move, from a country dependent on agriculture and primary commodities, Malaysia has today become an export-driven economy spurred on by high technology, knowledge-based and capital-intensive industries.

 Industrial Production in Malaysia increased 5.80 percent in October of 2012 over the same month in the previous year. Industrial Production in Malaysia is reported by the Department of Statistics Malaysia. Historically, from 2007 until 2012, Malaysia Industrial Production averaged 1.26 Percent reaching an all time high of 14.20 Percent in March of 2010 and a record low of -18 Percent in January of 2009. In Malaysia, industrial production measures the output of businesses integrated in industrial sector of the economy such as manufacturing, mining, and utilities. This page includes a chart with historical data for Malaysia Industrial Productio.[i]


Privatization Policy

 Privatization Policy

In Malaysia, two main policies that are directly associated with privatization of public entities are the Privatization Policy (Dasar Pensawastaan Malaysia) and Malaysia Incorporated Policy (dasar Pensyarikatan Malaysia). Both policies were instituted in 1983.

Foreign Direct Investment

Foreign Direct Investment

Foreign direct investment (FDI) is investment directly into production in a country by a company located in another country, either by buying a company in the target country or by expanding operations of an existing business in that country.

Foreign direct investment is done for many reasons including to take advantage of cheaper wages in the country, special investment privileges such as tax exemptions offered by the country as an incentive to gain tariff-free access to the markets of the country or the region.

economic crisis

economic crisis

The term financial crisis is applied broadly to a variety of situations in which some financial institutions or assets suddenly lose a large part of their value. In the 19th and early 20th centuries, many financial crises were associated with banking panics, and many recessions coincided with these panics.

Other situations that are often called financial crises include stock market rashes and the bursting of other financial bubbles, currency crises, and sovereign defaults. Financial crises directly result in a loss of paper wealth; they do not directly result in changes in the real economy unless a recession or depression follows.

A situation in which the economy of a country experiences a sudden downturn brought on by a financial crisis. An economy facing an economic crisis will most likely experience a falling GDP, a drying up of liquidity and rising/falling prices due to inflation/deflation. An economic crisis can take the form of a recession or a depression. Also called real economic crisis

What is globalization?.

Globalization is a process of interaction and integration among the people, companies, and governments of different nations, a process driven by international trade and investment and aided by information technology. This process has effects on the environment, on culture, on political systems, on economic development and prosperity, and on human physical well-being in societies around the world.

During the late 1980s a new term entered popular discourse: globalization. Instead of clarifying issues of world development the buzzword rather seemed to add confusion and misunderstandings. There are at least five different dimensions of globalization that need to be distinguished:

i.        economic globalization
ii.      political globalization
iii.    common ecological constraints
iv.     cultural values and institutions, and

v.       globalization of communication.

Concept of Bumiputra.

The country is multi-ethnic and multi-cultural, which plays a large role in politics. Three main races are malay, Chinise and India. There is a important concept called Bumiputra.

A Bumiputera doesnt have to be a Malay and Muslim.In the penisular, a Bumiputera is a Malaysian citizen which includes the Orang Asli tribes, the rumpun bangsa Melayu (includes Jawa, Bugis, Minang, etc)

Bumiputera Sarawak includes: Bukitan, Bisayah, Dusun, Dayak Laut, Dayak Darat, Kadayan,Kalabit, Kayan, Kenyah (termasuk Sabup dan Sipeng), Kajang (termasuk Sekapan,Kejaman, Lahanan, Punan, Tanjong dan Kanowit), kemudian Lugat, Lisum, Melayu,Melano, Murut, Penan, Sian, Tagal, Tabun dan Ukit.

Bumiputera Sababh includes: Dusun, Kadazan, Kwijau, Bajau, Iranun, Murut (Sabah), Orang Sungei, Sulu / Suluk, Bisaya (Sabah / Sarawak), Rungus, Sino - native, Kadayan (Sabah / Sarawak), Tidong, Tambanuo, Idahan, Dumpas, Mangkaak, Minokok, Maragang, Paitan, Rumanau, Lotud, Keturunan Pulau Kokos, Iban / Dayak Laut, Bidayuh / Dayak Darat, Melanau, Kenyah, Kayan, Lun Bawag (Sarawak), Penan, Kajang, Kelabit.